Systemic challenges in human resources and hiring processes are a key explanation for why employee turnover is so high. What can be done to address these issues?

Finding the right candidate to hire is a tough enough challenge, but having that employee flame out, is even more frustrating -- and costly. The rate this happens though, is depressing -- the probability of a new employee failing after 18 months is close to 50 percent. The financial cost to companies should be an eye-opener, but other factors such as continued productivity, company reputation, camaraderie, and employee morale should not be neglected either.

Systemic Challenges

The reasons why new employees don’t always stay in their jobs vary greatly. Some are role-specific (working for a poor manager or accepting a lower salary than really desired) and must be addressed on a micro level. However, there are certain trends which are systemic to the recruiting and human resources sector, and which can’t be ignored by companies who aim to grow their business.

For starters, only recently have studies been conducted to assess the real cost of high employee turnover. Senior management is (naturally) only going to enforce changes in an inefficient process if it perceives a significant financial loss to the company. Because most companies don’t realize just how much they’re losing from this churn, they don’t feel the need for change.

In large part, recruitment is terribly inefficient because it lacks scientific or data-based assessments — companies rely too heavily on intuition and unstructured interviews, which are often flawed. A great comparison was made in The Guardian newspaper on how scouting for sports relies heavily on statistics and recommendations but how scouting for employees does not. In fact, studies have shown that interviews can do more harm than good. Judging a candidate’s capabilities largely on interviews instead of on quantifiable data (academic merit, references, etc.) is more likely to lead to poor candidate selection.

Another systemic challenge is that hiring failures often aren’t tracked or quantified internally, which means that it’s impossible to know – and therefore address – the root cause of these failures. Learning where improvements can be made will lead to better candidates being hired, who are likelier to stay with the company longer.

Hiring processes (from applications process to interviews) and employers’ focus on hard skills (knowledge on a particular subject necessary to get the job done, such as proficiency in a particular software program) are unable to evaluate power skills or soft skills. It makes sense to guarantee that qualified candidates possess those hard skills. But in reality, the biggest complaint employers have — namely in regards to recent graduates — is that they are deficient in power skills such as critical thinking, communication, and teamwork. These foundational skills are integral to success in any role, particularly in today’s workplace.

How to get new hires to stick

What if there were a way to make hiring more data-driven, and therefore more likely to select the most suitable candidates? Authess uses authentic assessment software to evaluate how candidates perform in real-life scenarios compared to benchmarks set by current employees in that company and role. These authentic assessments have two-fold value. First, they represent a clear indicator of a candidate’s approach to actual on-the-job scenarios, as compared to their potential future peers. Second, these types of tests have shown to reveal more intangible skills like empathy, and power skills such as critical thinking, which are crucial to any role but which only become evident during this type of real-life scenario. Ensuring candidates have the right hard skills and power skills is one challenge these assessments overcome. Meanwhile traditional personality tests, in use by many talent acquisition professionals, have been shown to be poor predictors of job performance.

Now, imagine a candidate has a degree in a relevant subject for a role, they interview well, and get the job. But without an understanding of their actual skills, there’s no way to know for certain whether they understand how to apply their knowledge in real-life. This is incredibly valuable knowledge for employers to have prior to making an offer. Undergoing an authentic assessment as part of the hiring process also exposes to candidates the type of functions they would be expected to perform, which means they’re less likely to have a false understanding of the job (another cause for leaving a new role).

If hiring processes--both filling the hiring pipeline with qualified candidates and narrowing down to the best candidates--were more scientific and data-driven, there would be a great deal more accountability (and trackability) from a cost perspective for the company. Additionally, because employers are provided with full reports on performance, they can identify positive or negative trends to address internally, if appropriate.

Looking ahead

Authentic assessments are currently being utilized by an array of sectors, due to the positive results they produce — especially in revealing skills that are nearly impossible to identify during the application process. As companies start to appreciate the value of recruiting the right candidates the first time around, more of them will start looking to data-backed tools like Authess to evaluate and redesign their human resources processes. Doing so will increase company profitability, employee satisfaction, and employee retention.